Escalating electricity supply debt by municipalities is negatively affecting Eskom’s financial performance, the power utility said on Monday, after the high court in Pretoria handed down a R1.3-billion order against the Emfuleni municipality for failure to pay arrears.
“The overdue debt is impacting negatively on the public utility’s liquidity, financial performance and sustainability, leaving the public utility no option but to borrow in order to meet its financial commitments,” Eskom said.
Eskom further said the Emfuleni municipality failed to pay “despite the municipality’s healthy revenue collection of about 90% from its customers”.
“Eskom has started with the execution steps against the municipality to recover some of the municipality debt including attaching the local authority’s bank accounts and moveable assets.
“Emfuleni municipality is currently indebted to Eskom to the amount of R5.3-billion despite several litigations brought by the power utility since March 2018 to get the municipality to service its account.”
Eskom also served the municipality with summons for non-payment of its R3.4-billion bulk electricity supply bill. This has resulted in Eskom and the municipality’s customers applying to the court to transfer the municipality’s electricity distribution licence or part thereof to the power utility.
“This application is to be heard in March 2023 and would set a precedence for municipalities failing to pay their Eskom debt and complying with the electricity supply agreements,” added Eskom.
Meanwhile, Eskom announced early on Tuesday that it will roll out stage-two power cuts from 9am until further notice due to a breakdown of a generating unit at its Duvha power station and a delay in returning to service another unit at Duvha.
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